Several savings and credit co-operative organisations risk being stopped from lending, paying dividends, or investing due to low levels of capital.
Less than half of Kenya’s 175 deposit-taking Saccos would meet the minimum threshold of capital if all their customers claimed their contributions, according to a report released yesterday by the industry regulator.
The Sacco Societies Regulatory Authority (SASRA) said Thursday that 168 deposit-taking Saccos were able to fully maintain the prescribed core capital of Ksh 10 million, with the remaining seven failing to meet the requirement.
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“Only 69 deposit-taking saccos were able to maintain and comply with the prescribed institutional capital to total assets ratio of eight per cent, with the majority failing to comply with this key regulatory minimum,” said the SASRA chief executive, John Mwaka.
The regulator said 144 saccos were able to maintain the prescribed core capital to total assets ratio of 10 per cent. Six were unable to maintain the prescribed core capital to total deposits ratio of eight per cent. The sector’s gross loans last year stood at Sh297.6 billion, up from Sh258.18 billion in 2015.
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